In the case of Mulcrevy, and Fidelity and Deposit Company v. City and County of San Francisco (1913), the U.S Supreme Court ruled in favor of the defendant, City and County of San Francisco. The plaintiff, Mulcrevy had been contracted by the city to construct a sewer system but failed to complete it within the agreed time frame due to unforeseen obstacles such as hard rock formations that were not mentioned in his contract. He sued for additional compensation citing these unexpected difficulties which he claimed constituted a 'changed condition'. However, his claim was rejected on grounds that he should have anticipated potential challenges given his expertise as an experienced contractor. Furthermore, there was no clause in their agreement providing for extra payment under changed conditions nor did any law mandate such provision at that time.

In the dissenting opinion for Mulcrevy, and Fidelity and Deposit Company v. City and County of San Francisco, Justice Holmes disagreed with the majority's decision to uphold a city ordinance that required all public works contracts to include a provision mandating eight hours as a day's work. He argued that such an ordinance was not within the power of the municipality because it interfered with freedom of contract between private parties. Holmes believed this law went beyond protecting workers' health or safety - which he acknowledged could be legitimate reasons for limiting working hours - but instead imposed an arbitrary standard on employers and employees who might mutually agree to different terms. Furthermore, he contended that if cities were allowed to regulate labor conditions in this way, there would be no limit to their ability to interfere in private contractual relationships.